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Announcement Relating to the Proposed Disposal of the Biosciences Business
Ascendis Health Limited
(Incorporated in the Republic of South Africa)
(Registration number 2008/005856/06)
JSE Share Code: ASC
ISIN: ZAE000185005
(“Ascendis Health” or the “Company” or “the Group”)
ANNOUNCEMENT RELATING TO THE PROPOSED DISPOSAL OF THE BIOSCIENCES BUSINESS
1. INTRODUCTION
Shareholders of Ascendis Health (“ASC Shareholders”) are referred to the announcement published today
regarding a proposed transaction for the recapitalisation of Ascendis Health (“the Group
Recapitalisation”) (“the Group Recapitalisation Announcement”), which referred to the potential
disposal of non-core assets. ASC Shareholders are further advised that a sale of shares agreement (“SPA”)
has been concluded between Ascendis Biosciences Proprietary Limited (“Ascendis Biosciences”) and
Klipspringer Products Proprietary Limited (“Klipspringer”) (collectively “the Sellers”), the Company,
Agricultural Biosciences Proprietary Limited (“the Purchaser”), Avima Proprietary Limited (“Avima”),
Ascendis Biosciences (East Africa) Limited (“East Africa”), Klub M5 Proprietary Limited (“KM5”), Ortus
Chemicals Proprietary Limited (“Ortus”), pursuant to which the Sellers shall dispose of its entire
shareholdings in Avima, East Africa, Ortus and KM5 (the “Sale Shares” and the “Biosciences Business”)
(“the Disposal”). The Disposal is subject to the fulfilment of the conditions precedent detailed in
paragraph 4.3 below.
2. NATURE OF THE BIOSCIENCES BUSINESS
The Biosciences Business manufactures and distributes a range of agro-chemical pesticides, herbicides
and insecticides for the South African and Sub-Saharan African agriculture and public health sectors.
3. RATIONALE FOR THE DISPOSAL
The Company’s board of directors (“the Board”) has previously communicated its commitment to reduce
the Group’s unsustainable debt levels. The Disposal is in line with the Group Recapitalisation.
4. SALIENT TERMS OF THE DISPOSAL
4.1. Purchase consideration
4.1.1. With effect from the Closing Date (defined in paragraph 4.4 below), the Seller will sell the Sale
Shares to the Purchaser for a cash consideration equal to the Final Purchase Consideration,
provided that the Conditions Precedent (per paragraph 4.3) have been fulfilled.
4.1.2. The Final Purchase Consideration shall be:
4.1.2.1 an amount equal to R85,000,000.00 (“the Initial Purchase Consideration”) payable on
Closing Date, plus or less,
4.1.2.2 the Adjustment Amount (as defined in paragraph 4.1.3),
4.1.2.3 subject to a cap of R115,000,000
4.1.3 The Adjustment Amount will be determined within 10 (ten) days of the Closing Date as the
difference between the Actual Working Capital (“AWC”) on the Closing Date and the Target
Working Capital (“TWC”), leading, as the case may be, to an increase or decrease to the Initial
Purchase Consideration, where:
4.1.3.1 AWC shall be calculated as the aggregate of the Biosciences Business’s inventory, trade
and other receivables, cash-on-hand less trade and other payables as at the Closing
Date; and
4.1.3.2 TWC is R95,080,000.00 (ninety-five million and eighty thousand Rand).
4.2. Use of proceeds
As detailed in paragraph 3 above, Ascendis Health will use the net proceeds of the Disposal to reduce the
Group’s debt.
4.3. Conditions precedent
The Disposal is subject to the fulfilment or waiver (to the extent permissible) of the conditions precedent
contained in the SPA, including, inter alia, the following:
4.3.1. the holder of the right of first refusal (“ROFR Holder”) indicating, in writing, to the Company that it
does not wish to follow its right of first refusal to acquire the shares and claims in Avima (“Avima
Shares”) on the same terms and conditions as set out in the SPA within a period of 30 days
commencing from the date that Ascendis delivers a signed copy of the SPA to the ROFR Holder.
Alternatively, the ROFR Holder failing to indicate, in writing, to the Company within a period of 30
days commencing from the date that Ascendis delivers a signed copy of the SPA to the ROFR Holder,
that it wishes to exercise its right of first refusal to acquire the Avima Shares on the same terms and
conditions;
4.3.2. the Sellers obtaining the written approval of the Company’s lenders under the existing bank
facilities to the sale and transfer of the Sale Shares contemplated by the SPA; and the written
consent of the lenders to the release of any security in relation to the Sale Shares or any assets of
Avima, East Africa, KM5 and Ortus; and
4.3.3. the approval of relevant competition authorities in relation to the Disposal, to the extent legally
required.
4.4. Closing Date
The Disposal will be implemented on the Closing Date, which is expected to take place in the third quarter
of the 2021 calendar year. The Closing Date shall be determined as the last business day of the calendar
month in which the last condition precedent is fulfilled or waived or if the last business day of such
calendar month is less than five business days after all of the conditions precedent have been fulfilled or
waived, as the case may be, the Closing Date shall be the last business day of the following calendar
month.
4.5. Other significant terms
The SPA contains certain representations and warranties which are standard for a transaction of this
nature.
5. FINANCIAL INFORMATION
The net asset value of the Biosciences Business as at 31 December 2020, being the date of the last
unaudited six-month interim financial information of the Biosciences Business, was R70,000,000.00
(seventy million Rand). The unaudited loss before tax attributable to the Biosciences Business for the six
months ended 31 December 2020 was R57,843,332.00 (fifty-seven million eight hundred and forty-three
thousand three hundred and thirty-two Rand). The financial information was prepared in accordance with
International Financial Reporting Standards and the Companies Act.
6. CLASSIFICATION OF THE DISPOSAL
The Disposal meets the definition of a category 2 transaction as contemplated in the JSE Listings
Requirements.
7. REFERRAL TO RENEWAL OF CAUTIONARY ANNOUNCEMENT
ASC Shareholders are referred to the Group Recapitalisation Announcement and are advised to continue
to exercise caution when trading in their Ascendis Health shares until a further announcement is made.
12 May 2021
Bryanston
Financial Advisor
Deloitte Capital (Pty) Limited
Transaction Sponsor and Regulatory Advisor
Questco Corporate Advisory Proprietary Limited
Date: 12-05-2021 04:22:00
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